Fintech firm Allica Bank achieves first full year of profit since launch three years ago

Allica Bank, which specialises in lending to small to medium enterprises (SMEs), also said its total lending to such businesses had increased 47 per cent to £2bn in the year. Customer deposits also increased 75 per cent – by over £1bn – to £2.6bn.

The company posted pre-tax profit of £61.1m, making it one of the fastest UK fintechs to achieve full year profitability.

The firm said the results underline a period of “continued growth, strong financial metrics and watershed achievements.”

Commenting on the firm’s performance over the last 12 months, Richard Davies, CEO, said: “The last year has been incredibly successful at Allica. We’ve seen significant growth in revenue, lending and deposits, showing that our proposition for SMEs is starting to really cut through.

“Recording our first full year profit just three years after opening our doors for lending on the eve of the covid lockdown was a true milestone in challenging market conditions, and one we’re very proud to have achieved.”

Since opening for lending in 2020, Allica is the UK’s only digital bank built exclusively for established SME businesses - which comprises firms with five to 250 staff. Such companies make up over a third of the UK economy.

Last year also saw Allica Bank launch its business current account, which now has over 2,000 customers, accounting for 0.5 per cent of its targeted segment of established SMEs.

The company also grew its asset finance business last year, surpassing £200m in annual lending for the first time since launching the product in 2021.

The firm’s net interest margin also increased to five per cent during the period, up from 3.6 per cent in 2022.

Allica Bank is now aiming to scale further, targeting an above 10 per cent market penetration in coming years, in a bid to drive what it describes as “true market wide change to transform banking for established SMEs.

During the period the bank launched a savings campaign calling for better rates for the UK’s SME savers, highlighting £7.5bn of “missing” savings interest across the SME market.

The company was recently named as the fastest-growing UK fintech ever by Deloitte.

The firm was also announced as Best Business Finance Provider at the British Bank Awards, alongside winning more than 20 other industry awards throughout the year.

Mr Davies added: “We were recognised as the fastest-growing UK fintech ever in Deloitte’s annual Technology Fast 50 rankings, and we are proud to not only be growing quickly but sustainably by investing back into the business, our products and our people.

“Allica remains the UK’s only full-service digital bank dedicated to serving established SMEs, and we are laser focused on transforming banking for this critical segment of our economy.”

Prior to taking his work at Allica, Mr Davies was previously chief operating officer at London-headquartered neobank and financial technology firm Revolut.

Mr Davies was also previously CEO at digital lender Oaknorth.